My Savings Account Rate Fell After the Fed Rate Cut. Here's What That Means for My Savings Plans

If you're even a casual follower of the financial news, you've undoubtedly heard that the Federal Reserve dropped the federal funds rate by half a percentage point on Sept. 18. While this decrease didn't exactly come as a surprise, the consequential drop in savings accounts and certificates of deposit (CD) rates has left many Americans uncertain and questioning their savings plans. Myself included.

Less than 24 hours after the Fed decrease was announced, my UFB Portfolio Savings Account APY took a dive. My account APY fell from a cushy 5.15% to 4.01% -- a 0.32% drop.

What impact has that drop in APY had on my personal savings plan? In short: not much of an impact at all, for a few key reasons.

1. UFB still offers an ultra-competitive APY

Of the high-yield savings accounts we cover at Motley Fool Money, only a small number still have APYs over 5.00% (and those are by no means guaranteed to last). So my new APY of 4.01% is still hanging in there with the best of them.

While a 5.00% APY would earn $500 on a savings balance of $10,000 in a year's time, my 4.01% APY would earn $483 on the same balance over that year. Since my UFB account has other benefits I enjoy and no hoops to jump through, I'm willing to overlook that $17 loss to stick with my current account.

2. No minimums or monthly fees

The minimum to earn the max APY on the UFB Portfolio Savings Account is $0. That's right, you can open and start funding your account with any amount -- even that $7 you had planned to spend on ordering lunch out at the office before you opted for the PB&J instead -- and still earn the account's best (and only) APY.

On top of that, the account has no monthly fees. While you will pay for special services like wire transfers and stop payments, it won't cost you a dime just to keep the account open and stash your savings there.

3. ATM access and no withdrawal limits

This is one you don't see often with online savings accounts. UFB will provide account holders with a complimentary ATM card so they can access cash from their accounts. A downside of some online savings accounts is that you often must transfer funds to another account to take cash out.

And to make that point even better, UFB doesn't enforce any limitations on the number of withdrawals you can make from your account. Many banks still restrict you to just six free withdrawals per statement cycle (a holdover from the now-suspended former Regulation D rules).

4. Excellent mobile app and customer service

UFB has a clean and easy-to-use mobile app. I can log in with facial recognition and see all of my connected accounts (not just those with UFB) on the account overview screen. The app also offers the ability to move funds, view account alerts, mobile deposit checks, and chat with its Evo customer service, among other things.

The app gets a stellar 4.8 out of 5 stars in the iOS app store and a similarly high 4.7 out of 5 stars in the Google Play store. When it comes to handling our money, the fewer issues we experience, the better, and it seems like users are pretty pleased with the UFB app experience.

I also want to give a quick plug for UFB's customer service. I asked a question via the Evo chat service shortly after opening the account. The response I received was quick, friendly, and thorough. I was very pleased with the experience.

My savings plans are unchanged, but now is a great time to check your own account

For all the above reasons, I'm sticking with my UFB Portfolio Savings Account, despite the recent downtick in APY.

But as for you, it's an excellent time to review your own deposit accounts if:

• Your money is still with a brick-and-mortar bank that pays you pennies in interest per year. There's a good chance you could benefit by moving your funds to an online high-yield savings account (like the UFB Portfolio Savings Account) instead.
• You're already reaping high interest yields in an online savings account. Review your balance. Do you have the recommended three to six months of expenses stashed away for your emergency fund? If so, great! If not, try setting up automated deposits into your savings account to boost your balance, or check out side gig opportunities to earn more income.
• You're one of the lucky ones who's rolling in so much savings dough you just don't know what to do with it. Consider investing the extra in a brokerage account or funding your retirement savings. As nice as savings account rates continue to be for now, they simply can't touch the average 10% annual return the S&P 500 has averaged historically.

If you've got more money in savings than is necessary for your emergency fund, you're doing yourself a disservice by not striving for those higher returns. And if you're still working to hit that initial savings target, take heart and know that while savings rates may continue to fall gradually, they won't bottom out overnight, so your current balance (and anything you add to it) will continue to grow if you keep it in the right account.